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A group of Maniototo women is preparing to step up its campaign against Labour’s proposed water policy, saying a royalty on irrigation water would be the "theft of a fair return" on decades of farmer investment.

Puketoi Station farmer Emma Crutchley said "Water Maniototo" had had a soft launch on its Facebook page about 12 days ago and had this week released a video portraying a "positive image" of Maniototo farming and showing a water royalty would be unjust. At 2c per 1000 litres it would cost Maniototo farmers about $2million a year — part of a wider $6million loss for Central Otago predicted by the Otago Water Rights Users Group, Miss Crutchley said.

She said Maniototo farmers were "gutted" about the proposal as feared they could be forced to either sell irrigation shares; sell their family farm — possibly to corporate owners — and move somewhere with higher rainfall; or convert to a more intensive land use such as dairy farming.

This is because it would only be corporate dairy farm owners who could absorb the irrigation royalty, and so the policy would be counterproductive, in fact forcing the intensified farming.

"No-one else is as competitive as them [corporate dairy farm owners], no-one can handle those costs like corporate dairy. They’ll pour more water on and more fertiliser on and that will make the problem worse."

Miss Crutchley said intensive farming could affect water quality, but irrigation in itself did not. This could be seen from data from the Ministry for the Environment when it was correlated with data from Irrigation NZ about land areas irrigated by region. The data showed irrigation did not cause water quality deterioration.

Family-owned beef and sheep farms in the Maniototo were operated sustainably and responsibly within Otago Regional Council water consent conditions and not causing water pollution.

She disputed Labour water spokesman David Parker’s figures about the water royalty, and said it should not be "user pays", but "polluter pays". Any farmer who contributed to water pollution should contribute to improving water quality, but farmers who did not cause water pollution should not have to pay.

"If there are any problems, they are best dealt with at a local level and can be done so for a fraction of the money Labour is proposing ... It’s [the proposed water royalty] not sound public policy. It would be the theft of a fair return on decades of investment made in good faith by farmers who have been in full compliance with the law. It’s not fair."